How To Sell Diamonds To Millennials

“Millennials spent nearly $26 billion on diamond jewelry in the four main markets last year, acquiring more than any other generation.”

Pexels by Joel Carter

The jewelry industry has a problem selling diamonds to millennials. It’s proving to be as hard a nut to crack as the rocks the industry sells. Since 1947, the industry has hitched its wagon to the wedding industry, becoming the engagement ring of choice for brides when De Beers first launched its famed "A Diamond is Forever" campaign. The timing was fortuitous, as WWII veterans returned home, got married and started the post-war baby boom.

Those baby boomers were raised on the “Diamond is Forever” marketing message, so when it was their time to marry, they chose diamonds but put their own spin on the tradition by going bigger and bolder than their parent’s generation. And it’s continued with the GenXers, adapting with new cuts and colors, but always diamonds. Then came the millennials and things came to a grinding halt.

The problem with millennials is not just that they aren’t getting married at anywhere near the rate of the three preceding generations, but also many millennials are skeptical about the diamond engagement ring tradition. They don’t buy the industry’s suggestion that a groom should spend three times his monthly salary on an engagement ring. With their dedication to making informed and educated purchases, they troll the web researching where they can find stones for less.

Furthermore, their drive for self-expression often translates into a distaste for doing what the “old folks” always have done. They seek out their own expressions and to establish their own personal traditions, which may make a colored stone their pick. Or with their propensity to indulge in experiences, they may forego an engagement ring entirely now to indulge in an extravagant honeymoon, figuring they can wait for a diamond if they want one eventually.

In an effort to help the diamond industry bridge its gap with millennials, the diamond-industry leader De Beers has just published its "Diamond Insight Report 2016." It describes the state of the diamond industry, its challenges marketing to millennials, as well as the opportunities in the current market. The study’s authors tend to interpret the findings in a positive light, as expected by a company sponsor heavily invested in the market.

In its global analysis, De Beers clearly identifies new opportunities, including the self-purchasing women; the married “heavy owner,” so named for people owning eight or more pieces of diamond jewelry; innovative designs and branding. But these promising marketing opportunities are not going to make up for the shortfall in the millennial wedding market.

“Millennials spent nearly $26 billion on diamond jewelry in the four main markets last year, acquiring more than any other generation,” reported Bruce Cleaver, CEO of De Beers Group. “Perhaps most encouragingly, millennials are still 10 years away from their most affluent life stage, presenting an opportunity for the sector to capitalize more fully on a generation comprising more than 220 million potential diamond consumers in the four main markets,” which includes U.S., China, India and Gulf/Middle East countries.

The U.S. market is by far the world’s largest market for diamonds, accounting for 45% of the world polished diamond jewelry market or $79 billion in total. Here's my take on the De Beers’ report and how the jewelry industry can bridge the diamond gap with American millennials.

If diamonds are forever, millennials extend the diamond’s life

The De Beers report addresses the need for the industry to responsibly source new diamonds for the environmentally-conscious millennials. But deeply ingrained in the millennial's conscientious-consumption mindset is a drive to reuse, repurpose and make due whenever possible with the material goods at hand.

That is opening the door for jewelers putting old stones in new settings or selling vintage diamond jewelry to couples looking for something truly unique. It's an opportunity that surprised Elizabeth and Pamela Doyle, founders of New York City’s Doyle & Doyle jewelers, who opened their doors in 2000 to make vintage and estate jewelry accessible to what they term “downtown girls,” who are not interested in the exclusive uptown offerings and shopping experiences.

“When we opened, we thought we were going to sell low-priced, everyday wearable vintage jewelry, but early on people came in looking for engagement rings,” Elizabeth Doyle said. “And that is predominantly our business now. But it wasn’t our plan.”

Doyle & Doyle’s millennial customers are drawn to the one-of-a-kind nature of their vintage offerings, transforming the engagement ring buying process into a true experience. “You know when that ring is your ring. When she puts it on her finger, it comes to life. It breathes life into the ring and the life into the person. It is a magical moment,” she said, also noting that millennials invariably shop as a couple for their ring.

In millennials' drive to get more for less, value is key

For millennial couples choosing a vintage ring is not only about self-expression or a conscientious-consumption decision. It can be a smart financial decision as well. “In picking out the engagement ring, couples work out all kinds of things that are important in embarking on their life together. They talk about budgets, what is important to them, styles, aesthetic, price. They make compromises until they get to a place they both feel good about,” Doyle said.

Increasingly, more millennial couples are compromising about the price spent on the diamond ring with experiences that are more meaningful in their life together. The De Beers report recognizes this, “Consumers are increasingly valuing experiences over products alone.” The solutions offered in the report are more brand stories, new in-store experiences, like cafes and bars, and personalization and customization, all of which are good.

But the real rub comes in the absolute price charged for diamonds. The Jewelers of America pegs the average ticket price for an engagement ring about $4,000, with an additional $1,000 spent on her wedding band and $500 on his. Add tax, and that is close to a $6,000 investment in a symbolic object when couples might feel a good chunk of it would be better spent on an experience that will ultimately yield greater satisfaction and happiness.

The opportunity is to make diamond jewelry more affordable, which numerous e-commerce companies, such as Blue Nile and Brilliance, offer. In addition to a more reasonable price due to economies of scale available through online retail, Blue Nile and Brilliance offer access to massive stores of stones in every shape and size with the customers able to personalize their ring by picking their own setting. Both companies note that brick-and-mortar jewelry stores can't match their selections.

4Cs is too complicated; Make it simply brilliant

In numerous focus groups with affluent, highly-educated consumers, they've told me repeatedly about how intimidating the diamond buying experience is and how the 4Cs guide to diamond quality-- Carat Weight, Cut, Color, Clarity—actually makes the selection decision more complicated, not less. A millennial-age man with a post-graduate degree said, “You need an engineering degree to understand them.”

Recognizing this conundrum, Leo Schachter Diamonds markets its branded Leo Diamond as certifiably more brilliant and with more sparkle. Jewelers will tell you that brilliance is simply a function of how the diamond is cut. But that is beside the point, brilliance and sparkle are features that the consumer can see and experience, unlike the 4cs which requires a jewelers’ loupe and technical training.

Hearts on Fire is another diamond brand that uses its distinctive cut technology to create diamonds that “display ultimate fire, sparkle, and brilliance every time to look larger and sparkle more than ordinary diamonds,” i.e smaller stones, but more sparkle.

In conclusion, I couldn’t agree more with De Beers’ assessment that “Tomorrow’s customers are not the same as yesterday’s.” The jewelry industry needs to understand that yesterday’s marketing strategies and tactics aren’t going to work for tomorrow’s millennial customers.